TeliaSonera Gains as SEB Sees New Strategy From Managers

Feb. 22 (Bloomberg) -- TeliaSonera AB rose the most in more
than five months in Stockholm trading after SEB AB recommended
buying the stock, saying strategy by new managers at Sweden’s
largest phone company may help earnings and cash flow.

TeliaSonera advanced as much as 2.4 percent to 44.5 kronor,
the steepest intraday gain since Sept. 6, and was trading up 2.1
percent at 11:37 a.m. Volume was 74 percent of the three-month
daily average, and the stock was the second-biggest gainer on
the Stockholm 30 Index today.

SEB increased its recommendation on Stockholm-based
TeliaSonera from hold and estimated the share price will rise to
49 kronor. Newly appointed executives are likely to make
strategy shifts such as limiting purchases that may enable
investors to benefit from extra free cash flow, Andreas
Joelsson, an analyst at SEB, said in a report to clients.

TeliaSonera could “in a bullish scenario” afford an
ordinary dividend of 3.2 kronor per share and an extra
distribution in 2013 of 4 kronor, SEB said.

Chief Executive Officer Lars Nyberg resigned on Feb. 1
after a law firm hired to investigate graft accusations said
TeliaSonera should have been more careful when it bought an
Uzbeki phone license in 2007. Chairman Anders Narvinger is also
leaving the board. The company proposed Marie Ehrling, Mats
Jansson, Tapio Kuula, Nina Linander, Martin Lorentzon and Kersti
Strandqvist as new board members on Feb. 14 and the re-election
of Olli-Pekka Kallasvuo and Per-Arne Sandstrom.

“The new board and new management team are likely to focus
on improving the current organization,” Joelsson said. “The
strong cash flow we expect in 2013 should allow TeliaSonera to
leave 2013 with a very strong balance sheet, creating the share-price support that justifies our rating upgrade to buy.”